The Next FEMA

THE NEXT FEMA….One of the reasons FEMA failed in the aftermath of Hurricane Katrina is that it had suffered from four years of the Bush administration’s signature commitment to cronyism combined with its signature contempt for serious policy development. Needless to say, though, this attitude toward governance affects everything the administration touches, not just FEMA. So where are we likely to see the next serious federal meltdown?

The Treasury Department seems like a good guess, especially because its decline is so obvious that it has united both liberals and conservatives in consternation. Here is the liberal Paul Krugman writing about the lack of policy expertise at Treasury:

Less obvious to the public is the hollowing out of the department’s expertise. Many experienced staff members have left since 2000, and a number of key positions are either empty or filled only on an acting basis. “There is no policy,” an economist who was leaving the department after 22 years told The Washington Post, back in 2002. “If there are no pipes, why do you need a plumber?” So the best and brightest have been leaving.

Today, Treasury has fallen on hard times….Most of the key sub-Cabinet positions are vacant, and it appears that the administration is having great difficulty filling these positions.

….This is really quite amazing, because normally Treasury has no trouble attracting very high quality people for its senior positions….[But] people want to work at Treasury to do what the department historically does ? develop tax and financial policy, manage exchange rates and other international economic issues, and be the administration’s principal liaison to Wall Street. Giving speeches to high school students and being forced to implement policies that Treasury had little say in developing just isn’t as interesting.

….The problem is that we have a Treasury Department for a reason. It fulfills a necessary governmental function even in a minimalist state. One of these days, we may have some sort of financial crisis that will demand the full use of Treasury’s expertise. I just hope there is someone there to answer the phone when that day comes.

Of course, we can always hope there won’t be a crisis in the next three years. In fact, as Brad DeLong notes, there appears to be at least a 50% chance that there won’t be.